Posted
by
Unknown Lamer
on Tuesday June 03, 2014 @03:59AM
from the only-sort-of-starving-now dept.

An anonymous reader writes "The Seattle City Council announced on Monday that it has unanimously approved a $15 per hour minimum wage mandate. The new rate will go into effect starting April 1, 2015 in a tiered, gradual manner that depends on employer size. In the first year of implementation, hourly minimum wage will be raised to either $10 or $11 according to the employer size category. By 2021, hourly minimum wage across the board should be at or above $15. Seattle is the first city to implement a living wage for its lowest earners."

It's indexed to inflation. The value is $15 in 2017 dollars. For the sake of making this readable, I will represent the value of $15 in 2017 as $X, and the value of $15 in the year it is earned as $Y. Thus, in 2017, X = Y. After 2017, X > Y. Before 2017, X Y. X and Y might still be hard to read but I promise this was worse before I edited it, since I kept saying "$15 in 2017 dollars" for X and "$15 in contemporary dollars" for Y:).

If you look at the graph, it only converges on $X wage for all businesses by 2025.

The 2021 figure is when the last business category ( 500 employees) hits a $Y minimum wage, and minimum $X of total compensation. Eg. in 2021 those companies can count healthcare against the $X, while only actually paying $Y. But by 2025, and they still have to be ready to pay the full $X by 2025.

$15 per hour is barely a livable wage currently; there's no way it will be in 2021.

and thanks for pointing out the problem with the minimum wage...

Its NEVER enough.

I'm not suggesting we do nothing about wage disparity, but the minimum wage does little to help the poor. Most of the poor don't have jobs to begin with, and raising the minimum wage will make that even worse.

$15 per hour is barely a livable wage currently; there's no way it will be in 2021.

$15/hour is approximately $30,000 per year. If you can't figure out how to live on $30,000 per year then you are utterly clueless and/or spoiled. No it won't be a posh lifestyle but it's certainly enough to get by and it will be in 6.5 years too baring economic catastrophe.

$15/hour is approximately $30,000 per year. If you can't figure out how to live on $30,000 per year then you are utterly clueless and/or spoiled.

It's truly sad how many of this sort of ignorant comments a story like this brings out.

The main thing to take note of is that many people who work for minimum wage don't work full-time. So, you can't just extrapolate from an hourly wage to an annual salary. And most part-time workers are subject to the whims of their employer in terms of work schedule. If you're not getting enough hours from one job, it's often difficult to add on another part-time job, because many employers demand flexibility in your schedule. You can't come in a few times? Fine -- they'll start calling someone else.

No it won't be a posh lifestyle but it's certainly enough to get by and it will be in 6.5 years too baring economic catastrophe.

If you're (1) a single person (2) with no kids (3) in good health (4) with no dependents (5) in an area where rents and cost of living aren't outrageous, yeah, it's almost "certainly enough to get by." You might even be able to live reasonably well, if you are budget-conscious. If any of those is not true, it can be harder. If you have a number of these "conditions," even assuming a full-time job and a $30,000 income, it may not be easy.

It's truly sad how many of this sort of ignorant comments a story like this brings out.

The main thing to take note of is that many people who work for minimum wage don't work full-time. So, you can't just extrapolate from an hourly wage to an annual salary. And most part-time workers are subject to the whims of their employer in terms of work schedule. If you're not getting enough hours from one job, it's often difficult to add on another part-time job, because many employers demand flexibility in your schedule. You can't come in a few times? Fine -- they'll start calling someone else.

No it won't be a posh lifestyle but it's certainly enough to get by and it will be in 6.5 years too baring economic catastrophe.

If you're (1) a single person (2) with no kids (3) in good health (4) with no dependents (5) in an area where rents and cost of living aren't outrageous, yeah, it's almost "certainly enough to get by." You might even be able to live reasonably well, if you are budget-conscious. If any of those is not true, it can be harder. If you have a number of these "conditions," even assuming a full-time job and a $30,000 income, it may not be easy.

Why does it have to be easy? If you made poor decisions in your life (no skills, children you can't afford, living in an area you can't afford) why is it my responsibility (or the government's responsibility, or a private company's responsibility) to provide for you? The only item I agree with on your list is health, often health problems are not under a person's control. For things that ARE under a person's control, they made their choices, they should be the one to pay the piper. If your skills do not command a high enough salary it is your failing, not your employer's. If you provide more value for your employer and your job isn't so easy that they can hire a 16-year-old off the street to replace you then you have bargaining power when it comes to salary negotiations. If you don't educate yourself and your only skills are what your employer teaches you after being hired then you shouldn't expect to make a ton of money.

Did I say it had to be? No. I was arguing against the Parent Poster's comment, which was in response to GP's comment that a minimum wage was "barely a liveable wage." The Parent responded and said people who couldn't figure out how live on that were "clueless and/or spoiled" and it was "certainly enough to get by."

I then responded to and said it probably wouldn't be that easy for everyone, and I gave examples where it might be harder, i.e., closer to GP's claim that for some people it might "barely" be "a liveable wage."

In other words, I wasn't at all arguing that it should be "easy," but rather that for some people with these situations, it simply isn't, and it's rather ignorant to suggest that it is.

If you made poor decisions in your life (no skills, children you can't afford, living in an area you can't afford) why is it my responsibility (or the government's responsibility, or a private company's responsibility) to provide for you?

Some people are actually stupid, you know. I don't mean to insult them. I mean that for some people it's really difficult to develop good skills that would be worth more than $15/hour to somebody. If you're officially "mentally retarded," you can often get government subsidies to assist you. But if you're above the arbitrary borderline, you're on your own. Many of the guys who are washing dishes in a kitchen or cleaning the bathroom or bagging your groceries would have serious difficulties developing more "skills" to be competitive in the marketplace. I'm NOT saying we should just give them a happy life for free, but not everyone in the world has the same natural talents for earning potential as anyone else.

As for children, growing up in poverty has all sorts of negative repercussions for kids, and it leads to a cycle where the kids end up living crappy lives again. I don't think there are easy answers to this problem, but simply saying "it's not my problem" will ultimately lead to a generation of more kids in poverty, committing more crimes, etc. down the road. Again, I'm NOT saying we should just throw money at the problem, but we shouldn't ignore it either. (Also, note that combined with above -- stupid people often don't make the best choices. That can include having kids they can't afford. But as a society we've decided that forced sterilization of stupid people is wrong. So... well, that leaves us with a problem of people who sometimes have kids they can't afford, and we need to address it somehow.)

As for "living in an area you can't afford," well, it depends on where you can get a job. You move out of the city, maybe you have to get a car -- a car costs money, insurance, gas, maintenance, etc. You save on rent, but spend more for your car and have a longer commute which means you can't work as many hours. Sure, in some cases you could solve things by moving, but in other cases it's not so simple. I'm not saying this one is the government's problem, but it is a rationale for trying to tailor our poverty policies to the cost of the standard of living in a particular area. Hence my reply to the original parent about $30k -- in some areas, that's plenty to live comfortably. In others, not so much. We just need to be conscious of that.

The only item I agree with on your list is health, often health problems are not under a person's control.

How about (4) on my list: other dependents? Like, for example, ailing parents. Are they under your control, too? I made my choice to care for my sick dad who can't work, so I have to "pay the piper"? Also, there are all sorts of situations where you can end up taking care of people -- for example, kids often end up living with aunts or grandparents if their parents are unable to care for them (for whatever reason). Is it still my "choice" to make if my grandkid needs a home, and I don't want him to go to

I'm currently in Seattle, living as a graduate student. I'm employed in a school associated research lab as a graduate researcher, making the maximum the lab can pay me, per school guidelines, at $15/ hour. This glorious number is set to be the new minimum wage. So let's talk about what it's like to be on minimum wage. Or at least what it will be like.

Should I find a better job? The job I have is a fantastic for when I leave school, providing an exceptional network and excellent experience. I'm doing research to reduce energy use in the construction sector, which benefits society as a whole. Leaving this job would be short sighted. Admittedly, when the minimum wage increases, not all low paying jobs will be like this, but many good jobs still are.

Should I live elsewhere? Rent in the area is high and going higher, so I live with 3 other people. My location is in the city, but in the cheaper areas, not trendy at all and less safe overall, but it works. I live in this city because this is where the jobs are. I could move to the suburbs, but that would require both car payments and gas payments, neither of which are cheap, especially given >$4 gas. Public transportation is an alternative, but it costs both money (2.50 or so a ride) and time (an hour each way, so that's 30 dollars of lost productivity per day). That may not seem like much, but on $15 an hour, it's tough. So I currently bike when I can.

Eating out here is quite expensive, with most non-fast food places providing meals that start at 12-13 dollars and quickly rising from there (and that's the going rate for a burger, the most pedestrian of foods), so I eat in. Can't waste an hours worth of work to have a meal out, after all. It's not terrible, because I can cook quite well, and I've shifted to a primarily vegetarian life style, as meat is expensive.

So at the end of the day, my paycheck goes to food and shelter, both of which are kept as cheap as possible. What little extra I have is saved and used for emergency funds, which can be wiped out pretty quickly in some unforeseen event. God help me if I'm hit by a car, or come down with the flu. Being out of commission for a week is not an option. All in all, I feel I'm doing a good job pushing my future forward. But my present is a fragile system that could be wiped out given a large enough hit.

So what am I saying? Your simplistic idea of "you're an idiot and you should move" completely ignores what life is like on a tight paycheck. There are bright people on a low paycheck, and it's quite the trap. Life on a slim budget has no room for error, and when your entire system revolves around survival, it takes extra work to plan for a future.

What should be more frightening to you is that you are surrounded by people who live like this. The people who take your cash at the starbucks, the people who clean your trash out from your desk. You rely on these people, and yet you look down on them and mock them. You're lucky you are where you are at, because what you do not have to do is pull yourself up from nothing. And if you are the person who came from the mean streets and a poor family, congratulations, you've done something amazing. But if you are, you're an amazing jerk to all those who are trying to do the same thing you did.

Back in the 1990s, i was making $12-14 an hour rolling buritos for a restaurant chain. My wages changed if i went to a different store which is why there is a wage wiindow. Minimum wage went from 3.35 to around 5.25 or so. I only worked at minimum wage once and that was because it increased before i recieved raises.

Anyways, that was only possible because unemployment was low. We hired in kids with no work experience at $1-1.50 an hour above minimum wage just to get people in the door. With raises every 6 months, if you actually put some effort into the job, you could increase that in no time. Skilled people were hired in at even more.

The answer is not raising a minimum wage but lowering unemployment. That was the key to Clinton's "its the economy stupid". Anyone who wanted a job could get one and in most places, they could get one that paid somewhat better than minimum wage.

Minimum wage is not supposed yo be a living wage. It is not supposed to be a career goal. It is supposed to be a minimum for people with no work history so they can prove thenselves. It is a sad sign when our economy and people in it have resigned themselves to accepting the minimum and are relying on the state in order to better their careers. The answer is to lower unemployment. The people will go to whomever is paying the most and companies will have to pay more on their own out of profits in order to get and keep people. Prices don't jump either because they need to stay competitive with other companies.

The problem with trying to lower unemployment in general instead of raising the minimum wage is that there will always be people who it doesn't benefit. Maybe one town has a specific problem that causes more unemployment than the national average, or perhaps an individual has some disability or problem in their past (can't get a good reference) that stops the market working for them.

Employers will take any opportunity to lower wages, but employees can't switch jobs as easily. Employees need stability, while

The problem with fixing the price of a commodity at a high rate is that one hurts the consumers of the commodity. That is really what you are doing. You are fixing the price of labor at an artificially high price expecting that the increase in price won't be passed on to everyone else.

All this will do is push up the cost of living AND give executives an excuse to fire workers and raise prices, while shutting down small business.

Employers will take any opportunity to lower wages, but employees can't switch jobs as easily.

Really? Is "I quit" so hard to say?

Of course, if you lack skills that make you employable, you will have a hard time to find another job. But why should individual employers be burdened with paying for your lack of skills? If hard-to-employ people need financial help, it should be provided as welfare, and people should vote for it explicitly.

What raises in minimum wage really are is an attempt to sneak in tax incre

"Minimum wage is not supposed yo be a living wage."Stop with that nonsense.It's not true."No business which depends for existence on paying less than living wages to its workers has any right to continue in this country." FDR

in 1964, the min wage was 1:15. You could actually live off that with a one income family.Min wage has not kept up with the real cost of basic needs. like housing, transportation, entertainment, food, cloths.

You shouldn't be taking retail for your example. Basically, you are engaging the fallacy of cherry picking. A retail location has many products and few employees so the increase per item would be small. What about the service and manufacturing sectors? Let's assume a current $10.00/hr minimum wage and an increase to $15.00/hr

What happens when the manufacturing cost increases by 50% to 100%? Remember, if someone is making $14.00/hr and you give the janitor a $5.00/hr wage to $15.00, your worker is going to want $19.00/hr or more.

Most restaurants have a very small profit margin, so what will happen when employee costs increase by 50%? Does the owner try to sell? Just shut it down and leave? Increase prices by 50% to 100%? If the cooks are making 1/3 more than the dishwasher and the dishwasher suddenly starts making $15.00/hr, how much will the cooks wants $18,00/hr or $20.00/hr?

Sure, it is a $5.00/hr increase for minmum wage but it is a 50% increase in wage. What if the other employees demand a 50% wage increase as well? What if the union contract demands it? Suddenly, that 14.00/hr employee is making $21.00/hr.

Raising Walmart's minimum by ~50% would result in 1.1% price increases

Which is complete bullshit if you actually understand accounting. (Disclosure - I am a cost accountant in my day job) You'll note that the article you linked to has no actual analysis attached. If you actually look at Walmart's financial statements and information about their financials you would find that Walmart has around 2.2 million employees with an average unburdened [wikipedia.org] wage of $12.83. That means they pay around $55 Billion in wages each year which amounts to around 15% of their costs. That means that if you increase wages by 50% you would be adding $27.5 Billion in cost to the company each year which is significantly greater than the 2014 Net profit. Increasing wages by 50% would make Walmart instantly unprofitable.

I'm not even counting the cost of lost sales from the increased prices or the increased burden (overhead) costs that come with paying higher wages. So no, the effect would be FAR greater than 1.1%. You might want to actually check your sources instead of just accepting uninformed (or disingenuous) assertions at face value. I don't have any problem with increasing the minimum wage but don't be stupid about what the impact might be.

So you're going to give the cashier a 50% raise and give nothing to their manager?

Stop moving the goalposts. The post I was responding to said that a 50% increase in minimum wage equates to a 50% increase in labor expense. It does not. As a separate issue, you could give a raise to their manager (but not necessarily 50%). And it doesn't need to go all the way up the chain to the execs!

Don't be daft. Of course Walmart would increase prices if the minimum wage were increased just like everyone else. If they had to increase wages 50% UNILATERALLY they would instantly be unprofitable because they couldn't raise prices in that instance.

One minute you claim that a 50% wage hike would cause Walmart to be unprofitable, and the next you claim that they would increase prices. You can't have it both ways, and that's all I was trying to say. Also, any wage increases would be unilateral; Walmart's workforce is not unionized, and therefore all decisions regarding wages are made unilaterally since there is no second party to wage negotiations.

Regarding payroll taxes, you're oversimplifying. Many payroll taxes are regressive, with a cap on taxable income. Fringe benefits that you mention are also regressive (for example, employer's health insurance contributions for employees is not linearly proportional to wage, and doubling wages doesn't double insurance costs). Consequently, a 50% hike in wages does not result in a 50% hike in overhead costs. Additionally, depending on how you're cooking your books, you did already mention a $27.5B hike in labor costs. If the initial $55B in labor costs included this overhead, then the $27.5B increase also includes the 50% increase in overhead (despite the real increase in overhead necessarily being less than 50%).

7.5% isn't a bound of any kind - merely an illustrative simplistic example that the real number is a LOT higher than 1.1%.

But that's my point. 7.5% isn't a "LOT" higher. It's a lot less than the 50% growth in wages that we're talking about. Most businesses would jump at the chance to increase their costs by 7.5% while at the same time increasing their revenues by 50%, and I think we'd all agree that this is a good deal. Why does this not hold true when discussing wage hikes?

It's much more complicated than you are making it out to be. By raising the minimum wage you are increasing costs for all domestic manufacturers (and there are LOTS). This effectively is a subsidy to overseas (read China) manufacturers who do not have wage supports at the expense of domestic ones who do. Manufacturers in the US would have to either lose business or in many cases simply shut down. So to prop up Walmart associates wages you are doing so at the expense of US manufacturing workers. Since they shop at Walmart too that is revenue that Walmart isn't going to get AND you are costing people their entire paycheck to raise someone else's by 50%. Did you think the money would come with no consequence?

1) Tarriffs
2) The domestic service/retail industry dwarfs the domestic manufacturing industry. The perfect is the enemy of the good.
3) The money comes with consequences, and on the whole, it's still a positive.

There's no evidence to support your remaining claims regarding inflation, unemployment, supply chain effects, etc. However, I do agree that it's NOT simply that everyone is magically better off with no downside anywhere. Some people would undoubtedly be worse off, but overall, it would be a benefit to society.

people who drop prices to compete with walmart are idiots, as if they could compete on price, better to compete on quality, service or image, which are all actually easily achievable in comparison to walmart.

What else can you really compete on when you're selling basics like toilet paper and laundry detergent. Walmart isn't actually that bad when it comes to service either, at least the ones I frequent. They seem to get you through the checkout line quickly. The stores are clean and well stocked. There are employees around to ask for assistance What else could you ask for? I've seen more expensive department stores run much worse. You could try to stock higher quality products. This makes sense for things

What else can you really compete on when you're selling basics like toilet paper and laundry detergent.

The last one: image. Wal-mart has picked up such a negative image that a lot of people will pay extra just to make sure they don't have to shop there. Heck I personally buy a lot of store-brand generics for lots of products, but I won't buy those at Walmart because I don't want anyone who might come in my home to see a Wal-mart store brand product in my house.

One thing stores can compete in too is in non-imported goods. I try to buy "Made in the USA" goods when I can - particularly for things like tools. The local hardware store runs about 15-20% more than Walmart but a LOT of what they carry is domestically produced, and even for the stuff that isn't, they generally filter out the "junk" that Walmart sells. If something is of low/poor quality, that store generally won't stock it. They also have knowledgeable people working there, which helps. You're not going to find a person with actual plumbing or electrical experience working the hardware section at Wal-mart.

What the actual fuck? In the worst case, if your company somehow has 100% of their costs being labor, a 5% increase in wages would be a 5% increase in costs. It is mathematically impossible for what you say to happen.

A 5% increase in the minimum wage could easily be 20% increase in costs.

This is mathematically nonsense. Even if a business's costs come 100% from employee wages (a mythical business that pays no rent, has no equipment, no licenses, no worker training, etc.), a 5% increase in wages is... a 5% increase in costs.

That is the worst-case scenario. You are correct that small businesses don't have the level of efficiency of Walmart - payroll is probably going to be a higher fraction of total cost. The healthcare and the service industry tends to have the worst fraction, with about 50% of costs being payroll. That includes benefits, but if we ignore that for the moment and assume it's all wages, and wages get increased 5% you're still looking at a worst-case increase in costs of 2.5%.

I think, what you actually meant, is that a 5% increase in wages could easily result in a 20% reduction in profits. That is possible, although I am not sure it would, but it would still only be a 5% cost increase (may a bit more if you include tax considerations).

A 5% increase in the minimum wage could easily be 20% increase in costs.

I'm an accountant and that is pretty much nonsense. A 5% increase in wages cannot result in a >5% increase in costs. In the real world this is true even factoring in overhead because wages typically are significantly less than 100% of total cost. It would be correct to say that a 5% increase in wages could result in a 20% (or more) decrease in profit - that is certainly possible, particularly in a low margin business.

Okay, let's play the budget game and decide what you are going to cut. The discretionary side of the budget is approx. $1.020 Trillion and the non-discretionary side is approx. $2.6 Trillion. Discretionary has already been cut and you'll fail to notice any decrease in taxes. Of discretionary, military is about $570 Billion. Of that, approx. half is salaries and benefits. The personnel side has already been cut and is projected to cut more. No real appreciable saving due to those cuts are apparent. So that leaves training, procurement, etc. Procurement has already been cut. That leaves bases....except they've been cut as well and the Pentagon is floating another BRAC, which is strongly being pushed back against by your congresscritters which don't want a base cut in their district. Similar concerns occur with procurement except that congress is making it worse by demanding the Pentagon buy stuff they don't want. So let's cut all those overseas obligations. Hmmm...Europe, we can feed it back to the Russians, they'll like us for doing that and the Euroweenies cannot find the grit to defend themselves anyhow...except that isn't real expensive. Similarly with the Pacific, you won't mind being pushed around by China which already claims the entire S. China Sea owing to cultural history, blah, blah, blah...whatever excuse they are using to make their egos look bigger this year.

What about the rest of discretionary. You like clean air and water, yes? Don't touch EPA, the Republicans don't believe in it either so maybe you can get a few bill out of them. NIH? Does anyone in your family have a nasty disease? They fund research into those that the drug companies won't because not enough people will die from small ball diseases. The list there goes on.

How about the non-discretionary side. All those promises to the old folks that were made? They believed them even if the promises cannot be kept. So Grandma can come and live with you, yes? By the way, her meds are expensive so better start saving. We could start changing the promises made to younger generation so they'll not have a nasty surprise when they get blue hair. But those won't buy the next election and they won't save current taxes.

How about welfare? We could squeeze all the corruption out of that...except, if we knew how to do that effectively, we'd have already done it.

BTW: Don't forget about global warming and sea level rise. Norfolk, VA. and Miami, FL. won't. They want federal aid to stop the sea from eating their towns. So we could make changes now to mitigate that disaster...except that coal state pols claim that would be bad because it will suck jobs from their states...better to screw the world than they get dis-elected by disgruntled unemployed.

That is no problem. Even the small retailers can sell other things and stop selling bread temporarily, or close doors. For the economy and the consumers it is irrelevant and what matters is that everybody is buying cheaper breads. If and when the bread price starts to go up and become worth it again more people will start making it and balance the market again.

Small retailers that want to be immune to these tides should focus in quality and service and not in undercutting prices, even because they can`t

I don't think you understand how much regulatory compliance costs are for startups. I was working a startup vitamin manufacturing plant and had to get a survey in order to get a permit for a new storage building. This was to "ensure that it wouldn't flood", despite the fact that the property was basically on a cliff 50 feet above a small river, and wouldn't flood even in a million year flood, and it was totally obvious from their own flood maps. That was just a single small part of the idiocy. It wound up costing so much we just gave up and used a fucking storage container to store those chemicals. Much less safe, but it was all we could afford. Could have built a nice building with fire suppression and explosion proof fixtures and lighting if it hadn't been for regulators coming in and trying to triple the price of the thing along with their continual delays.

Funny part is, this was in "business friendly" Texas. Can't imagine what would have happened if we had tried to open in some place like California.

If people can afford living on one job only, they will quit their second and third jobs, opening up a lot of new jobs for those that might lose theirs.

I don't really get the idea of people losing their job because wages rise. Why? Why would I keep someone for 5 bucks an hour but fire him for 10? The question is whether I NEED the worker or whether I DO NOT need him. If I don't need him, I won't keep him for 5 around either. It's 5 bucks an hour that I could save, so why not kick his ass out? OTOH, if I do need him, I will have to pay him. 5 or 10 bucks. It will reduce my profit, but if I NEED him to do my business, I will HAVE to pay.

The only reason why I could fire someone due to an increase in wages is when this increase actually affects my cost in such a way that due to it I can no longer be profitable and hence have to close down entirely. Because either I CAN provide a service profitably or I CAN NOT. And that in turn is independent of the number of employees.

What can happen is that I would have to cut back on services I can provide now that would become unprofitable due to increased wages. Like, say, opening my shop 24/7 when the graveyard shift was only profitable because the worker was dirt cheap. Well, then I guess that means that people don't really NEED that service anyway. No loss here. The only thing we'll lose here is a few jobs in the minimal wage sector which, as noted above in the first paragraph, will easily be caught by the jobs now opening due to people working fewer jobs to make ends meet.

What it boils down to, and this is not a "theory", it's simply what I can observe by looking around myself: A minimum wage that doesn't only mean that you can sustain yourself but also that you can still maintain at least a moderate standard of living is in the end a boost to the economy because that standard of living has to be provided by someone. Of course the economic downturn has hit us, too, but by no means as hard as it has hit other countries with a lower social standard. People here still have money to spend and they DO spend, mostly on services. That in turn means jobs. That means less pressure on the social services provided by the state. Resulting in lower cost for social services. People are certainly doing worse than they did before the crisis hit, but we're a far cry from the situation the US is in. In a nutshell, even long time unemployed people can actually enjoy a minimal living standard and are kept from engaging in criminal activities because even they have a damn lot to lose.

I can go for a walk at 3am in the worst part of my town and return home alive and with all my cash and cellphone in my pocket. Can you?

Right. Loads of people live without ANY wages, so the minimum wage really should reflect that and be zero. Why are we cutting off the lowest rungs on the ladder to success? We have record real unemployment, but we are going to make it harder to hire people? Absolute insanity. If you have a problem with you wages not buying enough, take it up with the Federal Reserve. They are the ones printing money to stuff into bankers pockets, who are in turn spending that money into the economy and driving up prices.

I hope everyone on Seattle loves to interact with machines rather than people. That is what you will experience at McFastFoods, Starcoffee, and any other unskilled labored job.

Unfortunately this will hit teenagers the most. Contrary to what the supports of the home cherry pick, those who earn minimum wage have the least amount of experience. In other words, young people. And while the law will make some exception for teenager salaries, with the addition of all the enhanced automation, you'll have a city with a high population of unemployed teens which causes a different set of issues.

I hope I'm wrong and this turns out to be a good thing. It's nice to see a community try something different so everyone can learn from the experience.

it's actually a net loss for everyone if one of the ways that kid is undercutting lawn services is by not paying taxes on that income.

At lower income levels, the tax burden is very small. There's no way a lawn care service is remitting 50% of the money it charges, paying taxes and similar, so while there is a small loss to the local, state and federal governments, the net effect is extremely obviously POSITIVE for all involved.

What makes you think he's being paid under the table? Surely you Americans have something like a minimum taxable income or personal exemption? Where I live it's around $15,000 a year. Make less than that and you don't need to pay taxes, or even file a return. $600 every two weeks for the four weeks of summer is rather a lot less than that.

In Sweden we have no minimum wage. We're said to be one of the richest countries in the world, but there is a dark underground that very few speak about, and that is about all those people who work for LESS than the US call "minimum wage". It may sound like a joke to you (especially if you read the numbers), but I can assure you - it is not. When I was new to Sweden, I had to work for LESS than minimum wage as a substitute teacher in some small city. Substitute teachers have no rights, receive only what they can negotiate (which is usually very little, and we compete with foreigners and FAS3...gov. unemployed activity candidates) for the scraps.

The same thing with burger flippers, and now also train-personnel (they're currently on STRIKE in Sweden right now, for the rights to work full-time instead of being paid by the hour and shared amongst many desperate job seekers).

This seems to be the net outcome of the society we've chosen today, to let the few have 80% of our assets, and the rest just work as slaves for the 10-20% rich elite. I must stress that I am not a socialist or communist by a long shot, but there is something wrong with a society that can't pay their workers a proper wage.

Dealing with the effects of capital accumulation on the working class, Marx states:

"They mutilate the labourer into a fragment of a man, degrade him to the level of the appendage of a machines destroy every remnant of charm in his work and turn it into a hateful toil; they estrange him from the intellectual potentialities of the labour-process in the same proportion as science is incorporated in it as an independent power.... It follows therefore in proportion as capital accumulates the lot of labourer, be his wages high or low, must grow worse. It establishes an accumulation of misery corresponding with the accumulation of capital. Accumulation of wealth at one pole is, therefore, accumulation of misery, agony, toil, slavery, ignorance, brutality, mental degradation at the opposite pole."

"The only universal medicine (Marxists) have for social evils - State ownership of the means of production - is not only perfectly compatible with all the disasters of the capitalist world: with exploitation, imperialism, pollution, misery, economic waste, national hatred and national oppression, but it adds to them a series of disasters of its own: inefficiency, lack of economic incentives and above all the unrestricted rule of the omnipresent bureaucracy, a concentration of power never before known in human history".
-- Leszek Kolakowski (a man who grew up much like you, as an ardent Marxist and atheist, only to get hit on the head with a cold bucket of reality from the system that you love)

On the other hand, Communism kills tens of millions of people through starvation (Ukrainian "famine", Great Leap Forward, etc.). So you gotta make the call if you want the poor to starve or to just be unequal.

Yes he was. But the outcome of either system is the same - a small group of elites exerts control over the masses - they just differ on who the small group of elites should be.

Yes, exactly. Socialists whine about 'equality', then when they're in power they steal money from the poor taxpayers to pay for their Zil limos; but that's OK, because they don't actually own the Zil limos, they just use them.

In the Nordic countries, I can only assume that any working class receiving a meagre salary is insufficiently organized. When I moved to Finland to study, I initially didn't speak the language well enough to get white collar work, so I had to support myself by taking cleaning jobs. I was amazed how much money I was making compared to what I would have made in the US: though there is no legislated minimum wage, the union had succeeded in bargaining for high wages and other benefits, all of which employees in

In the first year of implementation, hourly minimum wage will be raised to either $10 or $11 according to the employer size category. By 2021, hourly minimum wage across the board should be at or above $15. Seattle is the first city to implement a living wage for its lowest earners

Santa Fe has had a living wage since 2003, presently at $10.66. San Francisco implemented a living wage shortly thereafter, presently at $10.74. I'm sure there are others at this point.

They've just promised that some other group of politicians will raise it years from now?

This seems to be the way so many new laws work: they're delayed until after the next election, so today's politicos can take the praise for passing the law, and the new bunch will be the ones in power when the problems become apparent.

I like how they conflate "minimum" and "living". The quoted councilman is doing it for effect, obviously, but it's not the same thing, and it won't be.

Jobs which currently exist, and are not worth paying for under the new wage will either go away, or become "sidework". This is how "sidework" started in the food service industries in the first place, after the minimum wage bumped to the point that it was no longer profitable enough to employ full time bus boys. It's why your tables don't get bussed by someone other than the waiter/waitress at even mid scale restaurants these days, and why in the higher end restaurants with bus staff, they tend to be paid out of shared tips from the wait staff at the lower end of high end places, or make minimum wage at the higher end.

Other jobs which are nice-but-not-strictly-necessary just won't get done. This is why your typical store owner doesn't have a kid washing down the sidewalk at the start of the day, and why the parking lot at the strip mall near your house looks like the inside of a dumpster, until the minimal cleaning work by local ordinance can be carried out by a street sweeper service that hits the parking lots of the local businesses as little as legally possible to get away with.

There will be jobs going away over this for sure. It will be interesting to watch how this plays out over time; I don't expect most other cities to be following this model, and I don't expect state adoption any time soon in Washington.

What we really need is a maximum wage; a maximum amount of annual income -- from any source -- that a person can make. This maximum amount should be tied to the median income or some such so that if the rich and powerful want to increase their earning limit, they have to do things that will benefit all of society instead of hurting all of society.

Too much of the economy's lifeblood (i.e. money) is sequestered in the bank accounts of the ultra-wealthy, which a) stalls the economy, and b) gives a disproportionate amount of socio-political power to those individuals. The current vast difference in wealth is as damaging to the human race as things like racism, homophobia, nationalism, etc. (if not more so), and people really need to realize this.

There is an entire class of people that most of society never sees, but which has a profound impact on their lives...and our current economic setup promotes sociopaths and psychopaths into this class. These people have the economic power and the self-centered focus to literally destroy the planet. This situation has to be rectified.

Wow, just a couple of comments up someone was accused of making the slippery slope fallacy because they proposed that "first they set the minimum wage, than they make if a 'living wage', then they start calling for a maximum wage. And here you are proving that they were not guilty of a fallacy at all!

What business hires employees they don't need? If you lay people off because the minimum wage is raised, who takes over the work those people did? You can spread around some of it to other employees but that only goes so far. Every single place I've ever worked at had just enough or usually less than enough people to do what needed to be done. Productivity has never been higher in the U.S.

OK so some businesses will not be able to either give up some profit or raise prices to accommodate the higher wages... they go belly up. But then whatever services they provided will be unavailable & someone will jump in & fill that gap. It's hard to believe the claims of job losses tied to the minimum wage.

What business hires employees they don't need? If you lay people off because the minimum wage is raised, who takes over the work those people did? You can spread around some of it to other employees but that only goes so far. Every single place I've ever worked at had just enough or usually less than enough people to do what needed to be done. Productivity has never been higher in the U.S.

OK so some businesses will not be able to either give up some profit or raise prices to accommodate the higher wages... they go belly up. But then whatever services they provided will be unavailable & someone will jump in & fill that gap. It's hard to believe the claims of job losses tied to the minimum wage.

It's not an employee you don't need. It's an under-performing load you wouldn't want anyways, or a tough choice you have to make having to let go of someone you actually like just to keep the rest of the business afloat. Starting a business is getting harder and more expensive than it was before. The new businesses that you say will jump in and fill the gap will have a higher cost structure than their predecessors, so the incentive is lessened, to the point where it's better to just not try.

(Wow, this got long...)When minimum wage became the big issue, with all the protests, I thought back when I made minimum wage. I flipped burgers and live in a house with 4 friends. Sure I couldn't afford rent and food at minimum wage, but I could afford 1/5th rent and food and have plenty left over. My friends (who also worked the same McJob) saved money, a couple bough used cars. We had every game system, a great stereo, I had a top of the line computer. We had enough and some luxury items. I thought back then and how much I made. I adjusted my wage with inflation and it came to...... $6.52/hr. WHAT? wait a sec, all those protesters with signs said if I adjusted for minimum wage, it would be 10.75/hr! What gives???

Now you see, the 10.75 is the highest value, in 1968. Claiming that should be the standard is as intellectually dishonest as claiming the lowest value ($5.98/hr) should be the standard. The median would be $7.78, and the average would be $7.94. A fair minimum wage increase would be in that rage. Last time we raised minimum wage in 2009, there was no issue... because it was with in that median-average rage. It was fair.

Minimum wage jobs are not meant to careers. They are entry level jobs for teens and young adults. Majority of minimum wage workers are just starting out. As you gain experience you become worth more to an employer and you should make more. If you aren't, look for a new job. Early in my adult life, I switched jobs every 1-2 years. Each job paid better than the previous.

There will always be somebody at the bottom. The young person who just starts out doesn't have anything. Some have debts, like college loans, so they have a negative self-worth. As we gain skills and earn more, our worth goes up. People love to tout the "Wealth inequality" but the better picture is "Income Mobility". What happens to those in the bottom 20%... From 1996 to 2005, over 50% of the people in the bottom 20% moved up to a higher bracket. In just 10 years, most moved up. Now why has the bracket increased in size if everybody is moving up? The bottom is always filled with new people entering the work force. The 9 year old in 1996 is now in the work force in 2005.

When you're selling hot dogs at the side of the street, if you set the price at $0, you'll lose money, and if you set the price at $100000, you'll lose money, but if you set the price at $3, you might make money?

You can't reductio ad absurdum a minimum wage like that.

As a difficult-to-implement experiment, I'd love to see what actually happens (I know what people of various political stripes will predict happens; I want to see reality tried and I want to see it tried a few times in different cultures so we aren't extrapolating from a single datapoint) when you combine Mincome [wikipedia.org] that met the "living wage" criteria, with abolishing the minimum wage.

Since everybody now makes Mincome, the living wage is no longer a factor and that knocks out the key motivation behind a minimum wage. Therefore, in principle, you can hire your fast food vendors at 50 cents an hour. Provided you can find them, of course, since if they have a livable wage, they don't have "sheer desperation" as a motivator to get a low-paying job -- but so long as the entire economy doesn't collapse to the point that the mincome is unsustainable, I'd view that as a positive change, not a negative. Job experience might be a motivator, though, and anyway a living wage isn't exactly a luxury wage -- somebody who made $10 an hour might be perfectly willing to work the same job at $2 an hour to effectively push their income up and save up for that xbox or whatever. Maybe shit job wages go down, maybe they go up, maybe it depends on the industry -- there are factors pushing in both directions.

Meanwhile, the mincome wouldn't be completely irrelevant to the lives of the relatively high-paid tech workers (obviously this varies with geography), but it wouldn't be an overriding concern either. It gives a bit more power to the worker in that they can be confident that their family won't starve if they quit in outrage or if a prospective employer calls the employee's bluff in a salary negotiation.

I know the mincome concept makes a lot of people grind their teeth just on the face of it (COMMUNISM LEADS TO DEAD BABIEZ!), but among other things it's about the only practical way to realize the theory of having truly no minimum wage at all. Bluntly, even slaves cost money to keep alive -- that expense combined with the limited hours in a day generates an effective wage floor even without the law, in the absence of some other income source like a parent or spouse or independent wealth or rampant theft.

Still further there is the even more ignorant people that believe that not only should there be a minimum, but that it should be a "living wage" -- because all work that must be done must also be worth enough to afford a nice cozy life.

Whoa, back the horse up. A living wage is not about a "nice cozy life". It is about not having to choose between eating and paying the rent. Believe it or not, there are some people in this country that have to make that decision. Why should anyone have to work 2-3 jobs just to survive when corporate profits are at an all time high?

I take it you assume this person has no kids. It might surprise you to learn that if you're single and childless and making minimum wage ($7.25/hr at 2000 hrs/year=$14500 yearly income), you aren't part of Romney's 47%. Yep, you pay taxes to the fed, and presumably to the state as well. Here's [forbes.com] a story about a woman making $12000/year and paying about $1300 in fed/state/ss/medicare. And that was before the payroll tax break expiration.

All of your numbers seem to magically assume a full-time job. Hint: many people who work at or near minimum wage don't have full-time jobs. They thus often don't get benefits, which means they don't get time off for illness or anything, which means you need to factor in lost wages when they can't make it to work.

When the GP says they have to cobble together 2-3 jobs, it's often 2-3 independent part-time jobs, which together often don't add up to 1 full-time job in terms of total wages. And to keep said jobs, you often have to work whenever you're demanded to, which might mean working two full shifts in one day some days, and nothing other days. Unless at least one boss is willing to be flexible, it will be difficult to hold onto more than one job, too.

If some of the jobs are seasonal or dependent on the weather or a service job where you only get called in when things are busy, expect to go through significant periods where you're making a lot less than full-time on that minimum wage.

will still have $450/month left over for food, clothing, etc.

The median rent level shouldn't be taken as a cost of living for any particular area in the U.S. -- obviously in most big cities, the median rent for the city will likely be higher than the U.S. overall. Also, unless you have dependents, you're probably going to pay at least some income tax with that sort of income -- not a lot, but it could still decrease your monthly discretionary spending by maybe $30-50/month (maybe more), which is a significant percentage of $450.

However, let's assume your numbers for the moment. Have you ever had to live on something close to minimum wage in a big city? There are a LOT of things that have to fit into that "$450/month left over for food, clothing, etc." It's not just "etc."

Do you need a car to get to your job? Insurance alone in a big city for a young person (most likely to be working at minimum wage) might cost you $100-200/month, not to mention fuel, maintenance, and a car payment. It's pretty difficult to imagine a situation where you could own a car for less than $100/month in a city. And if you don't have a car, you might have less flexibility about where and when you can work, or whether you'd be able to get between jobs efficiently. So you end up with a commuter pass for public transport instead of a car, which might also cost ~$100/month. (If you don't have a car, though, you might occasionally need to pay for transportation to get to somewhere unusual that you can't get to by public transport.) So, let's say at least $100/month for transport, probably at least $200/month if you really need a car.

Next let's talk about utilities. It helps to have a phone, if you want to actually be able to get calls to come in for a job. Even if you go with the cheapest landline, combine it with heat and electricity, it seems doubtful you're going to get away with less than $100/month total for utilities. Don't think there's going to be much left over for a cell phone or cable tv/internet.

Now you have to budget for miscellaneous expenses, like doctor and dental bills. If you're healthy, great. I know Obamacare is supposed to give poor people health insurance, but so far I get the impression it's mostly catastrophic health insurance unless you pay a higher premium (too high for your budget). Let's suppose you get a magic subsidy that gives you minimal coverage without any premium (most people this would also add a signfiicant expense to your budget as well, potentially thousands of dollars per year). If you just get sick, or have a toothache, be prepared to pay at least something out of pocket. On the low end, you might be able to get away with budgeting only $10-20/month for this, but if you have any health problems, you might need to budget a lot more.

You're uninformed and have a vastly over-sized opinion of your own knowledge. Plenty of very credible economists support the idea of a minimum wage, in fact many support a minimum wage nearly 50% higher than the current US minimum wage source here [businessweek.com]

You know when you see 'stupid' people saying they don't see why doctors, lawyers, scientists, programmers etc get paid so much because they don't understand what they do and thus think it must be easy? That's like you commenting on what 'serious' economists think when you clearly haven't got a fucking clue.

"At the moment, the trend has been to leech money out of the masses and into the hands of the few"

Yes.

" aided and abetted by productivity gains, the abolishment of many traditional trade barriers and the ability to arbitrage labor costs to countries with lower standards of living."

No, this is absolutely wrong. It has been caused 100% by central bank money printing. The corporations that are thriving right now are those with government contracts or are closely related to the banks. These are the

This is an experiment. If Seattle's unemployment rate goes up, you MUST accept the fact that raising the minimum wage kills jobs. If it goes down, then you MUST accept the fact that you are living in some sort of magical fantasyland where economic laws don't apply, and should immediately set about breaking windows and starting nuclear wars with aliens to improve the economy.

Imagine if there were a minimum home price. Say, $75,000. Sounds reasonable, right? I mean, everyone should have a right to be

this is what makes me angry about people bitching about minimum wage increases. there are *so* many countries with much higher minimum wages that you could quite easily look at to see the result of said changes.

Americans NEVER seem to look at other countries. No matter what you're discussing, health care, gun laws, wages, whatever, they always speculate wildly about what might happen if. Never mind that much of the rest of the world has already tried it and found it works pretty well.

Not true. We seem to look at third-world shitholes and say "hey, at least we're not a third-world shithole, we've got $THING better than they do". In my experience, at least, we don't generally compare ourselves to other first-world countries and especially not western and northern Europe, probably because we privately admit to ourselves that (unemployment aside) we're not doing as well as they are generally.

and those countries with higher minimum wages also tend to have better social services, and higher taxes to accommodate the increase in unemployment. You forget that we in America invented the "i've got mine, fuck you" mindset.

That's actually a flat out lie. All studies refute what you just said. Actually common knowledge refutes what you just said. When a business needs one additional hire they don't hire two people just because labor is cheap and they can afford it. They still hire just ONE. Low wages DO NOT CREATE JOBS. I'm so sick of hearing this lie repeated...

LOW WAGES DO NOT CREATE JOBS. GIVING WEALTHY PEOPLE MORE MONEY DOES NOT CREATE JOBS. HAVING MORE PEOPLE THAT CAN AFFORD A SECOND PAIR OF SHOES CREATES JOBS.

You seriously believe that? You should visit the far east, india or africa sometime and wise up.

I bet lots of US companies would love to get away with the kind of shit foxxcon does. Is that how you see the ideal job market? Why does it seem that a lot of Americans (some of you seem sane) want nothing more than to be rich and don't give a shit if everyone else is dirt poor. The 'company' seems to have most consideration for it's right to exist and make massive profits while employees are little better than chattel and that's fucked up.

You are under the assumption that all jobs must generate wealth. Look at a janitor, how much wealth is this guy generating. Are people going to buy more just because the toilets are clean? What about school districts, are the janitors mopping the floor making the school any money? Maybe we should just fire all the janitors because if they don't produce wealth, they must be useless.

What about cashiers?What about Middle Management?How much money to these people directly generate vs how much their paid? A good

Imagine the minimum wage is $100/hour. There's a massive number of job which simply do not produce that much wealth per hour - they cannot exist, because to offer that job to someone is to lose money. All those jobs disappear.

The jobs that people do for under $15/hr still need to be done. Not every job produces wealth. Nobody gets rich by having clean floors, or mowed lawns, or bagged groceries. However, these are examples of tasks that arguable have to be done by someone, and the cost of not having them done can, at least in some cases, be argued to be greater than $15/hr.

So how in the word is it possible that in the US 15/hour is barely a living wage? How wasteful a life are you living there seriously?

These are my monthly bills.

Mortgage $500

Electric $120

Car payment $300

Internet $70

Water & Trash $50

Phone $50

Student loan $300

Car Insurance $120

Medicine $250

Retirement $100

Gas & Groceries $550

Savings $100

Life Insurance $60

That's a total of $2570

If I take out savings, life insurance and retirement savings, that would be $2310. Let's say my car and student loan is paid off. That would be $1710. My take home pay after taxes is $1100 a month. I am fortunate en

This is such a silly concept. If the employer needs someone in order to make its business work, then it will hire someone. It's not a matter of choice, no employer likes having extra people just sitting around - that's wasteful at any price. A need for employees creates new jobs. This is the only thing that creates new jobs.

You say that this will reduce job opportunities for those who are less educated, but the reality is that the employer is going to get the best / most appropriate employee that it can n

Keep in mind that a family would qualify for SNAP and rent support also.

Translation: the employer can only get away with paying only $7.50 because the government makes up the difference between that and a realistic wage. Benefits without minimum living wage == state subsidy of industry. Still, don't worry, if you look around enough you'll be able to find someone faking disability to parade in front of the media, and prevent people asking awkward questions about how much taxpayers money goes to allowing working people to survive on unliveable wages.

In 2011, 73.9 million American workers age 16 and over were paid at hourly rates, representing 59.1 percent of all wage and salary workers. Among those paid by the hour, 1.7 million earned exactly the prevailing Federal min